Eskom has issued a public notice warning of possible electricity supply interruptions in the City of Johannesburg (CoJ) from July 8, owing to an alleged failure by the municipality to honour the terms of a settlement agreement relating to outstanding debt and the payment of its current electricity account.

The settlement agreement was made an order of the High Court in November last year.

In a full-page advertisement published on Sunday, Eskom said that CoJ and/or City Power (CP) owed it more than R5.25-billion and that it had decided to initiate a process that could result in the interruption of power supply “to stop spiralling debt”.

Eskom stated recently that the overall outstanding debt from municipalities had increased to over R111-billion and that it would pursue more so-called Distribution Agency Agreements with smaller municipalities, despite objections to the arrangement, including a legal challenge.

The utility issued the public notice relating to Johannesburg in line with the Promotion of Administrative Justice Act (PAJA) indicating that it intended to reduce, interrupt and/or terminate electricity supply to certain bulk supply points supplying the CoJ and/or CP.

In the notice, Eskom lists four substations, namely: Fordsburg substation, supplying Johannesburg CBD, Fordsburg, Auckland Park, Mayfair and surrounding areas; the Beyers substation, supplying Fairlands, Cresta and the surrounding areas; the Crowthorne substation, supplying Crowthorne, Carlsworld, part of Mnandi and surrounding areas; and the Allandale substation, supplying Midrand.

In November 2024, Eskom issued a similar notice to the CoJ and CP, which precipitated the negotiations that resulted in the settlement agreement and associated court order.

The court order stipulates that current electricity accounts should be paid in full and that historical debt instalments be paid according to an agreed repayment schedule.

It also states that a failure to comply will result in the immediate termination of the repayment arrangement and render the full outstanding debt immediately payable.

“Despite the existence of the court order and the indulgence granted by Eskom through the repayment arrangement, CoJ/CP has failed to honour the terms of the court order by failing to make payment of both the historical debt instalments and the current electricity account on the due dates,” the Eskom notice reads.

It adds that the continued breach of the court order has raised serious concerns regarding the municipality’s ability to meet its ongoing financial obligations to Eskom, and is placing Eskom under severe financial pressure.

The notice follows a hard-hitting letter written in late April by Finance Minister Enoch Godongwana to Johannesburg Mayor Dada Morero in which serious concerns were raised about the city’s financial sustainability and its compliance with the Municipal Finance Management Act.

Following a meeting between Godongwana and Morero on May 8, the Finance Minister issued a statement indicating that the mayor had agreed to consider serious remedial actions to address the issues raised and that the city would submit a formal report to the Treasury in response to the letter.

In parallel, Eskom indicated that it had resumed the PAJA process notifying residents and businesses of its intention to reduce, interrupt and/or terminate supply to certain bulk supply points supplying CoJ/CP with effect from July 8.

“Eskom appreciates the hardships the community and the economy will suffer should it exercise its statutory powers to disconnect the municipality. However, there are no other meaningful options available for Eskom to stop the debt and collect for current consumption on bulk supply.”

Eskom also invited affected parties to make written representations before the end of business on June 17, while also indicating that it would be open to “progresive representations” in relation to direct payment by customers or direct supply from Eskom.

In March, Eskom issued a PAJA notice confirming its intention to interrupt or reduce the bulk electricity supply to the City of Ekurhuleni, also in Gauteng.

Only days later, Ekurhuleni and Eskom reached an agreement on a payment plan for arrear debt, as well as in relation to the payment of current accounts.